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Thread: Representation of US Debt With $100 Bills

  1. #11
    Senior Member
    bprescot's Avatar
    Join Date
    Feb 2011
    Edgewater, NJ
    He might be an incredibly savvy guy, but on this one he's a little off. He's right in that the only way we default in August is if we choose to. Much the same way a restaurant in a really tight month won't automatically get their utilities turned off. The only way they get their utilities turned off is if they don't pay the bill. The US will only default on it's debt if we choose not to pay the debt interest. The problem is that much liked a cash-strapped restaurant has more than just the utility bill, the US has got more than just debt payments due in August. And there just isn't enough cash on hand to pay all of them without borrowing.

    The biggest fallacy of this entire circus is the notion that cutting spending, raising taxes or pretty much ANYTHING will change the fact that in August the US will need to borrow money (i.e. raise the debt ceiling) to pay all it's bills. We've got enough to pay the bank (i.e. debt payments) but SOMETHING will have to get shortchanged. Is it Military? Social Security? Education? All have big bills due in August and there's just not enough revenue to cover all of it without borrowing. The people that say that no deal by August 2nd doesn't mean default are technically correct. But the implication that there won't be a huge impact is false. It may not impact them, you, or me, but there WILL be an impact. Oh, and just because we pay the bank, if they find out we're not paying everyone else ... well that tends to make them nervous. We don't need to default to get our debt downgraded, and that can be just as bad as default.

    And lastly, we've only defaulted (TRULY DEFAULTED) once. And it's not what he's referring to. It was when a bookkeeping SNAFU held up payment of a $12M or so in debt payments. It got paid less than a week later. The result? The interest rate on the debt was raised .54% and was kept there for a little over two years adding over a billion dollars in debt payments. That was for a $12M glitch. This would be worse.

  2. #12

  3. #13
    Quote Originally Posted by oivind_dahle View Post
    That is from here I believe.
    "God sends meat and the devil sends cooks." - Thomas Deloney

  4. #14
    Every plan, every way I've considered this problem, I cannot think of a single solution for this situation(regardless of whether or not politicians could be bothered to co-operate) that doesn't fundamentally change our view of what the US government is. We can either stay America, status quo, and ride this out the hard way over decades(which won't be any worse than it has been for 2 years), or we can deal with the fact that our government needs to look different and do new things if it wants to provide a new solution.

  5. #15
    I hope you guys sort it out
    I live in Norway, and have our own problems.

  6. #16
    Senior Member
    mr drinky's Avatar
    Join Date
    Feb 2011
    St. Paul, MN
    Quote Originally Posted by bprescot View Post
    We don't need to default to get our debt downgraded, and that can be just as bad as default.
    This is so true. In fact a lot of the damage has already been done. Even if we escape downgrade this time, a rehash of this issue during the election year will ensure a downgrade IMO with a double dose of uncertainty. We need a long term solution for many reasons, but the biggest reason for me is so we don't have to listen to these f*#kin' politicians.

    And btw, this whole situation isn't helping the dollar slide. Just wait until a downgrade gives central banks a reason to sell off their dollar reserves. Yikes, more dollars yet. Those American knives are going to continue to get cheaper and those foreign knives are going to continue to get more expensive.

    Thank goodness we have good domestic knife makers.

    "There's only one thing I hate more than lying…skim milk, which is water that's lying about being milk." -- Ron Swanson

  7. #17
    Well at least they can't cut out our national healthcare plan..............because we don't ******* have one!!!!

  8. #18
    Senior Member
    Join Date
    Mar 2011
    Sebastopol, CA
    Perhaps we actually live on Planet of the Apes?

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